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Board of Education Budget Meeting. November 4, 2010. 11-4-10 Workshop Overview. The Purpose : Review and Update Deficit and Deferral Realities Fund Availability Reduction Options Answer Board Questions from Previous Workshops Provide a Timeline for Board Actions. 2. 2.

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Presentation Transcript
slide1

Board of Education

Budget Meeting

November 4, 2010

slide2

11-4-10 Workshop Overview

  • The Purpose:
  • Review and Update
    • Deficit and Deferral Realities
    • Fund Availability
    • Reduction Options
  • Answer Board Questions from Previous Workshops
  • Provide a Timeline for Board Actions

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review of the realities
Review of the Realities

Deficit Reality of $120m

Additional Deferrals May Necessitate Increased Borrowing

It is Impossible to Keep Reductions Away from Classroom

Board Must Approve Preliminary Reduction List by November 16 and First Interim Report by December 2

HR Must Begin PKS Process for Certificated Layoffs in December

School Site Allocation Formula Must Be Decided in December

update to the district deficit
Update to the District Deficit

State Budget Approved by Governor in September

$30.1m Additional Revenue Limit

Restoration of Negative COLA and $252/ADA Reduction

$ 3.5m Mandated Cost Claims Reimbursement

District Received 90% or $19.0m of Federal Jobs Bill Fund

District Received $9.0m for the 2009/10 SDA. Still Waiting for 2010/11 Remaining Amount of $9.0m

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update to the district deficit1
Update to the District Deficit

Baseline Current Deficit $ (141.6)m**

Federal Jobs Bill Fund (One-time Only) $ 21.0m

Projected Deficit* $ (120.6)m**

Potential Revenue Increases

State Approved Budget $ 30.1m

Final ARRA SFSF Funding $ 4.0m

Mandates ($3.5m less

50% reimbursement to schools $ 1.7m

Parcel Tax (Prop J) offset $ 42.2m

Best Case Deficit $ (42.6)m**

*County is Requiring Districts to Provide Solutions Based on Projected Deficit

**Deficit is Subject to Change Based on Final Ending Balance for 2010/11 and New State Actions

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risks for state budget mid year cuts
Risks for State Budget Mid Year Cuts

State Budget is Based on Very Optimistic Revenue Projections; Higher Than Projected at May Revise

California July and August Revenues are Tracking to the May Revision Forecast, Not Exceeding It

Assumes State Will Receive $5 Billion of Federal Funds

Expenditure Cuts: $7.5 Billion Are Assumed

However, One-third of the Fiscal Year Has Already Elapsed Without Reductions in Place

Assumes Personal Income Growth of 3.2% in 2010 and 4.5% in 2011

UCLA Forecasts Weaker Growth

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impact of staffing enrollment to ending balance
Impact of Staffing/Enrollment to Ending Balance

Over-budget - Certificated Staff (74.37) FTE $ (6.3)m

Excess Staff

Discipline Cases

Over-formula

Workers Compensation

Mainstreaming Impact

Over-budget - Classified Staff (51.35) FTE $ (2.3)m

Excess Staff

Discipline Cases

Return to Work Program

Workers Compensation

4th Friday Adjustment ( 22.00) FTE $ (1.8)m

Earned Enrollment Reserve ___________ $ 2.6m

Total (147.72) FTE $ (7.8)m

Numbers Are As Of 11/2/2010 …. Will Change …. Moving Target

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state budget brings more deferrals
State Budget Brings More Deferrals

Delayed Funding For Schools

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available unrestricted funds for 120 6m reductions
Available Unrestricted Funds for $120.6m Reductions
  • $120.6m Represents 20% of Total Funds Available for Reduction
  • 2010/11 General Fund Unrestricted $ 688.59m
    • Total Fixed Costs (i.e. utilities, interest, licenses) $ (42.62)m
    • Required Reserves $ (31.11)m
  • Funds Available for Reduction$ 614.86m

School Sites Central Office

    • Books and Misc Supplies $ 11.05m $ 2.85m
    • Other Non-personnel Budgets $ 10.40m $ 1.13m
    • Certificated Salaries & Benefits $ 442.86m $ 2.19m
    • Classified Salaries & Benefits $ 98.09m $ 46.29m

Total$ 562.40m $ 52.46m

92% 8%

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breakdown of fixed costs 42 6 m
Breakdown of Fixed Costs - $(42.6)m

Utilities-Includes Gas, Electric, Rubbish, Water, Sewer$(22.2)m

Telephone-Data Network, Voice Communication$ (6.7)m

Liability, Property Insurance Premiums $ (6.5)m

Transfer to Adult ED Fund $ (.7)m

Interest Expense (TRANS) $ (5.1)m

Software Systems Licenses (PeopleSoft, Zangle) $ (4.7)m

Transfers to Retiree Medical Funds $ (1.6)m

Administration Cost Reimbursement $ 4.9 m

Total$ ( 42.6)m

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breakdown of district reserves unrestricted general fund 31 1 m
Breakdown of District Reserves Unrestricted General Fund $(31.1)m

Ending Balance Increase/Designated Reserve$ ( 6.0)m

Designated Reserve Accounted for In the $120.6m Deficit Due to SDA Restoration

Reserve for Economic Uncertainties (2%) $ (22.5)m

State Require that Districts Set Aside 2% of Total General Fund Expenditures

Revolving Cash $ ( .1)m

Fixed Amount Reserved for Bank Accounts for Emergency Expenditures

Stores Inventory $ ( 1.7)m

Value of Instructional and Other Materials Held in Inventory

Prepaid $ ( .8)m

Reserve for Expenditures Paid in Advance Such As Travel and Postage

Total $ (31.1)m

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criteria for available central office resources
Criteria For Available Central Office Resources

Central Office

Books and Misc Supplies $ 2.85m

Other Non-personnel Budgets $ 1.13m

Certificated Salaries & Benefits $ 2.19m

Superintendent

Deputy Superintendent Academics

Area Superintendents

Classified Salaries & Benefits $ 46.29m

H/R, Payroll, Finance, Landscapers

Police Service Officers

Total$ 52.46m

Unrestricted General Fund Only

Excludes Departments or Personnel Directly Serving Schools

Excludes Fixed Costs i.e. Software Licenses, Utilities, Interest

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slide17

Legal Restraints to Outsourcing to the Private Sector

  • Contractual Ramifications
    • Employment Contracts Limit Outsourcing Potential
  • Education Code Section 45103.1 Restrictions
    • Severely Limits Circumstances under which a District can Outsource
  • Confidentiality Restrictions
    • SDUSD Must Maintain Strict Control Over Employee Records and Data
  • Private Sector Agencies Must Pay Prevailing Wages – This Severely Limits Savings Potential

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slide18

Barriers Around Outsourcing to SDCOE or Other Public Agency

  • Loss of Flexibility to Conduct Ad Hoc Analysis
  • Loss of Control Over Processes, Methods
  • Minimal Control Over Employee Flexibility and Priorities
  • Potential Systems/Technology Incompatibility
  • Conflict With SDCOE Oversight Role
    • SDCOE Has Oversight Over SDUSD Budget and Financial Reporting.
      • They Cannot Also Build the Budget (AB1200)
    • SDCOE Pays Prevailing Wages; No Cost Savings
    • SDUSD Scope is Too Large for SDCOE to Absorb
  • Public Agencies Operate Under Different Priorities

1 of 42 Districts

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criteria for 137 3m potential solutions
Criteria for $137.3m Potential Solutions

Solutions Must Help General Fund Unrestricted

Solutions Must Be Ongoing in Nature

Reductions to Other Funds Will Not Impact the Deficit

Can Be Implemented Without Negotiations

Given the Magnitude of the Deficit, It Is Impossible to Keep Cuts Away From the Classroom

92% of the Potential Reduction Pool is Budgeted at Sites

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impact of 30m site based reductions
Impact of $30m Site Based Reductions

School Allocations Will Be Reduced by an Equitable Percentage Formula That Takes Into Consideration Factors Such As:

Grade Level

Enrollment

Number of Free and Reduced Eligible Students

Number of ELL Students

Sites Will Have the Discretion to Implement Reductions Where Least Impactful to Their Programs

Schools will be Required to Maintain Class Sizes According to Contracts

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impact of 10 cut to central office auxiliary services
Impact of 10% Cut to Central OfficeAuxiliary Services

Value of 10% Reduction $ .58m

Impacts:

Reductions to Auxiliary Services will impact the management, leadership and bargaining unit interface affecting the operational, human resources and financial resources of one of the district’s largest groups of service providers

Strictly “reactive” capabilities, no “pro-active” actions supported, focus reduced strictly to safety and security items

Landscaping, custodial, maintenance, warehouse and distribution will all be negatively impacted

25

impact of 10 cut to central office board of education
Impact of 10% Cut to Central OfficeBoard of Education

Value of 10% Reduction $ .08m

Impacts:

Memberships or other Board activities will have to be reduced accordingly.

Contracted services will be reduced accordingly

Cumulative Prior Years’ Reduction: $ Only -27%; FTE Only -27%

26

impact of 10 cut to central office deputy superintendent academics
Impact of 10% Cut to Central OfficeDeputy Superintendent-Academics

Value of 10% Reduction $ .36m

Impacts:

Program oversight reduction or elimination may jeopardize program quality and funding compliance (Home/Hospital, Licensed Children’s Institute, Williams Legislation and McKinney Vento Education Assistance Act)

Increasing staff workload may result in student safety concerns, compliance issues, audit findings, funding reduction in the upcoming fiscal year, reduction of students served, impact to families, schools and community

Eliminate process for facilitating the evaluation and recommendation to BOE of newly adopted instructional materials. Jeopardize compliance with Education Code 60119, 60420-60422, AB 831 and SB 550

27

impact of 10 cut to central office deputy superintendent business other
Impact of 10% Cut to Central OfficeDeputy Superintendent-Business (Other)

Value of 10% Reduction $ .22m

Impacts:

Reduction of services from Strategic Sourcing. Increased time for response to schools and employees seeking services. Longer response times for RFPs, bids and purchase orders

Instructional Facilities will not be able to provide the level of Ad Hoc analyses currently provided to the Board and administration

28

impact of 10 cut to central office district relations
Impact of 10% Cut to Central OfficeDistrict Relations

Value of 10% Reduction $ .20m

Impacts:

Reduction of event management, board meeting broadcasts, e-newsletters and/or publications

Decreased capacity to deliver services directly to schools (e.g. student service learning) Reduction in required annual mandatory site volunteer and coordinator training

Less assistance with fiscal and policy matters and issues that may impact the district

Reduction in translation services to schools and departments during a trend in increased demand

Legal repercussions for reduction of mandated translation services

Cumulative Prior Years’ Increase/Reduction: $ Only 14%; FTE Only -22%

29

impact of 10 cut to central office financial services
Impact of 10% Cut to Central OfficeFinancial Services

Value of 10% Reduction $ .97m

Impacts:

Scale down annual Budget Book and District Profile (print and web versions) to basic report

Eliminate monthly financial reporting results and ad-hoc requests to the Board and Senior Leadership resort to reporting only at 1st and 2nd Interims

Delays in payment process may result in delays or lack of procurement of needed classroom materials

Compliance related reporting would be delayed

Cumulative Prior Years’ Reduction: $ Only -13%; FTE Only -25%

30

impact of 10 cut to central office human resources
Impact of 10% Cut to Central OfficeHuman Resources

Value of 10% Reduction $ .55m

Impacts:

The department will not be able to carry out human resources functions and meet the operational expectations set by the Board

Personnel actions will require increased time – reclassifications, employee concerns, enrollment impacts on allocations, etc will all be delayed

Hiring and all other job-related tasks will take longer

Ad hoc analyses will be impossible

Cumulative Prior Years’ Reduction: $ Only -32%; FTE Only -23%

31

impact of 10 cut to central office integrated technology support services
Impact of 10% Cut to Central OfficeIntegrated Technology Support Services

Value of 10% Reduction $ 1.11m

Impacts:

Significantly impacts the support, implementation, and training for the i21 program

Delay in computer support and repairs

Reduction in support to the growing educational and business technologies at schools and central office

Impacts all departments ability to do work when systems are down

Reduction of SARB related services

Delay in SARB cases referred to court

Cumulative Prior Years’ Increase: $ Only 11%; FTE Only 4%

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impact of 10 cut to central office legal services
Impact of 10% Cut to Central OfficeLegal Services

Value of 10% Reduction $ .29m

Impacts:

It is not impossible to make reductions without reducing staff

Increased need for outside counsel at a higher cost

Smaller law library and reductions in professional growth and continuing legal education

Additional burden on Legal Services support staff

Lengthened response time on legal issues and inquiries

Focus on urgent audit issues instead of routine district-wide audits

Cumulative Prior Years’ Increase: $ Only 0%; FTE Only 18%

33

impact of 10 cut to central office office of accountability
Impact of 10% Cut to Central OfficeOffice of Accountability

Value of 10% Reduction $ .01m

Impacts:

Some district assessments may need to be eliminated

Mandated reporting deadlines at risk leading to sanctions or loss of funding for programs

Delays in DataDirector support

Program evaluations not conducted in a timely manner

Delays in responses to data requests

Delayed efforts/processes to improve data accuracy, completeness and innovation

34

impact of 10 cut to central office school police
Impact of 10% Cut to Central OfficeSchool Police

Value of 10% Reduction $ .55m

Impacts:

Mandated and BOE policy programs will become a site based responsibility

Support of Community Based Organizations (CBO’s) related to school and child safety (Safe Routes to School, Project Safe Way, City Heights Collaborative, STAR/PAL, Crime Stoppers, etc) may be eliminated

All fire, intrusion, and camera monitoring/dispatching will be outsourced

All telephone calls requiring an actual police response will be directed to SDPD

All 3,000 annual criminal investigations and 850 criminal arrests will be directed to SDPD. NOTE: According to SDPD, failure to pass City proposition “D” will result in the elimination of all “juvenile service offices

Cumulative Prior Years’ Reduction: $ Only -24%; FTE Only -32%

35

impact of elimination of central office special projects
Impact of Elimination of Central Office - Special Projects

Value of 10% Reduction $ .03m

Impacts:

The Special Projects Office is on the list for elimination

If that occurs, it will not be possible to reduce a further 10%

If the office is sustained, a 10% reduction creates a department with minimal non-staff resources to maintain its services to senior administration and the Board

36

impact of 10 cut to central office superintendent
Impact of 10% Cut to Central OfficeSuperintendent

Value of 10% Reduction $ .05m

Impacts:

It is not possible to make this reduction without reducing or eliminating staff

This would adversely impact the ability of the Superintendent to fulfill his obligations to all stakeholders

Cumulative Prior Years’ Reduction: $ Only -42%; FTE Only -40%

37

impact of 10 cut to central office student services
Impact of 10% Cut to Central OfficeStudent Services

Value of 10% Reduction $ .24m

Impacts:

Delayed or outsourced responses to ADA investigations

Additional staff may need to be trained to meet the routine and emergency health needs of students

Crisis team response could be negatively impacted and/or delayed

Suicide risk assessments could be negatively impacted

Proactive guidance groups could be limited

Career and college planning sessions with students could be limited

Instructional services/time to Home/Hospital and Foster Youth could be restricted

Cumulative Prior Years’ Reduction/Increase: $ Only -43%; FTE Only 4%

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school closure update
School Closure Update

Schools Recommended for Closure Will Not Be Identified Solely By Enrollment

Other Factors

Enrollment

Capacity of Schools

Cost Per Pupil

Academic Achievement

The Impact of Eliminating Magnet and VEEP Transportation is Also a Contributing Factor

Two Committees are Developing the List of Closure Candidates and Other Impacts

Notification Per Procedure is Due in November

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november january budget timeline
November – January Budget Timeline
  • November 4 Special Budget Meeting (No Action)
  • November 9 Regular Board Meeting (Agenda Item)
  • November 16 Special Board Meeting (Action)
  • December 2 Special Board Meeting (Action 1st Interim)
  • December 15 Final Day to Submit to County
  • January School Allocations Distributed to Sites Based on 1st Interim Reductions and State Budget

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conclusion review of the realities
Conclusion-Review of the Realities
  • Deficit Reality of $120m
  • Additional Deferrals May Necessitate Increased Borrowing
  • It is Impossible to Keep Reductions Away from Classroom
  • Board Must Approve Preliminary Reduction List by November 16 and First Interim Report by December 2
  • HR Must Begin PKS Process for Certificated Layoffs in December
  • School Site Allocation Formula Must Be Decided in December

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